The diminishing need for instructing costs draftsmen for disputes that fall into the value band of provisional assessment claims

We have only instructed a costs draftsman twice in 2015.

Our litigation rates have been similar to previous years. This did not particularly bother us, however from time to time our in-house costs department bothers contacts us regarding potential instructions.

Having looked into a number of these files we noticed a common theme:

  • The loss of a success fee (as we tend not to charge success fees to clients, save for some of the big ticket insurer work) has removed one of the central items which prevented a settlement;
  • Most disputes now come down to time spent on activities and ‘solicitor-client’ costs;
  • Band rates are not too difficult to negotiate as a lot of work takes place outside of London;
  • All the above means the other side handle the costs in-house to also avoid the costs to their own client of appointing their own draftsman.

We have had 2 claims go to assessment. The first was local and resulted in success. The second is with the SCCO which has a mind blowing 6 month backlog so we will not find out the result for a long time.

This backlog has meant that some defendants have decided to increase their offers to pay out of their current year’s “pot” and avoiding assessment falling into their 2015-2016 figures.

I would be interested to know the trends of other litigators. Are they also finding a decrease?

Over and out.

Legal Orange.

A solicitor’s nightmare

You turn up to work. It’s just like any other day. Upon arrival that is.

For unknown reasons your case management system shows a trial date for the same morning. What?!! Oh yeah – THAT case. The case that used to dominate you with fear. The one you hoped would go away.

In fact you tried to blank it out. And today’s the day. S**t.

No witnesses. No expert booked. No Counsel instructed. Your immediate thoughts are “how can this have happened?”

You telephone the Court. You are helped for a split second when the clerk informs you the trial is not listed there for 10am. Phew!  No, it gets worse. They have transferred it to another nearby Court. The opposing side is already there. When are you turning up?

You know that you will need to hand in your notice today and fall upon your sword; but in the meantime you need to try and clear up your mess.

The most senior partner is in the office. You walk across and admit everything to him. Full and frank disclosure. The look on his face is pure anger and fear. The client is going to lose his marbles. He also knows the firm will face a claim on their indemnity insurance. It happened on his watch and the firm will take a lot of bad publicity over this.

He tells you to jump in the car – he will come with you to the court. On the way you discuss how an explanation will be provided and that an application to adjourn will need to be made.

On arrival, you go before the Court. Hands sweaty as you are an occasional advocate and know that you are about to face the brunt of everybody.

It goes as badly as you expected. Your case is struck out. No adjournment. INDEMNITY COSTS!!!

F**K F**K F***K!

Every solicitor has this dream at least once a year… mind was this week. I wonder if anybody else admits to having this dream too?

The version described above has happened to at least 2 people I know about in real life (both ex colleagues). One only had Counsel there with  no bundles, witnesses or experts. The other just walked out of the office and never returned. This is why it’s not easy to dismiss the nightmare!

Over and out.

Legal Orange.

Webb v Liverpool NHS – a party beating their Part 36 offer can still be subject to a proportionate costs order

So, a party who beats their Part 36 offer can still be subject to a proportionate costs order.

The judgment is not yet on Lawtel so the full reasoning is unknown, but it is likely to be a landmark costs case for 2015.

There were 2 limbs to the clinical negligence claim – (1) the incorrect choice of delivery;and (2) the delivery itself was negligently managed.

Although the claimant had beaten her Part 36 offer, she had not succeeded in establishing the second limb of her case and the judge awarded the claimant 65% of her costs.  The decision comes about the same time as the new Part 36 changes has come into play.

It appears the Judge decided that to allow a disproportionate costs order would result in an injustice.

Where does that leave us now? I commented on the issues towards the lower end of damages (particularly the £10k-£30k damages claims) recently. On these types of claims there is almost parity between the amount of costs it takes to reach trial and the damages claimed. Beating a Part 36 offer was a useful vehicle to achieve this. Now with this judgment being handed down, it will make solicitors wary of accepting claims under £50k. The only way to make up the difference would be through a DBA, but these still retain their nickname of “Don’t Bother Agreements” for a good reason.

Over and out.

Legal Orange.

WHEN YOU GET BACK TO WORK ON TUESDAY THERE ARE NEW CHANGES TO THE PRE ACTION PROTOCOLS IN FORCE: AND YOU MAY STRUGGLE TO FIND THEM

legalorange:

Just like the recent SI for Part 36…

Originally posted on Civil Litigation Brief:

If new rules are important you would think that great time and effort would be spent in making sure that practitioners had plenty of advance notice and they were readily available for study and consideration before they came into force.  However the latest revisions to the Pre-Action Protocols appear to have been published on the 1st April (that date could be significant) and virtually no effort spent on letting practitioners have sight of the new rules in advance.

BEST GUIDANCE

The changes are helpfully summarised by Ruth Pratt on the Lexis Nexis Dispute Resolution Blog. The include changes to the following Protocols.

  • Personal Injury and Clinical Negligence.
  • Professional Negligence and Judicial Review.
  • Housing Disrepair and Possession.
  • Social Landlords and Mortgage repossession claims.
  • The Low Value Personal Injury Protocol.

WHERE ARE THE PROTOCOLS AND WHAT ARE THE DETAILS?

No further details are available.  There was some consideration of the issues…

View original 159 more words

Proportionality has ruined £10-20k cases

Cases sneaking into the fast track may be costs bearing, however the chances of a party getting to trial with costs being lower than damages is unlikely.

We have a £11k damages case involving expert evidence costing £2,500.00 for the review of documents, site visit and expert report. Two other experts quoted higher fees than this as it is a specialist area.

The key witnesses need to provide long and detailed statements, and the disclosure involves historic maintenance records. The defendants will need to provide a notable amount of disclosure too which will need to be scrutinised.

The defendant is intransigent and their case handler at the defendant’s insurer has decided to run this to trial. We estimate our costs to trial to be £17k on this £11k claim. Proportionality is not going to be in our client’s favour, but we will not succeed without the expert evidence and witness statements which supplement. We also know that disclosure will hurt the other side more than us.

To make things worse, the defendant’s defence positively advanced something silly. We therefore are obliged to file a Reply. This is further costs which are necessarily and reasonably incurred, but likely to be disproportionate. Further, I anticipate the other side will not like the Reply (which does not provide anything “new”) and will insist we amend our Particulars (which is unnecessary). We shall tell them to apply to the Court if they feel so obliged, which they will not do; but the individual stubbornness of their ‘case handler’ means they will probably prepare a long Part 18 Request which will need to be batted away without much difficulty. More costs.

We do not fear the trial. Our concern is summary assessment of our costs being something silly like £8-9k and taking a circa £10k hit on our costs. Do we look to our client to make up the difference? Not really as that would extinguish their damages.

Proportionality. Still a load of nonsense 2 years on from Jackson.

Over and out.

Legal Orange

McKenzie Friends – to be seen but not heard

Or is it? Sadly this is not an April Fool.

http://www.lawgazette.co.uk/law/mckenzie-friends-could-drive-bulldozer-through-2007-act/5048031.article

If these changes are made then we could see unregulated advocates lacking PII cover making submissions to the Court. This does not fall solely at the feet of Grayling who bears the brunt of every criticism. The 2007 Act opened the floodgates to non-lawyers. Towards the lower end of the market the de-skilling is reaching a new low.

It matter not one jot whether the McKenzie Friend is being paid or not. That is not the point – it is whether they are providing correct advice and there is a form of redress available to the client. This is not going to end well…..

Quality Solicitors went wrong, but there is still a position for them in the market

So Quality Solicitors have decided to take stock (http://www.lawgazette.co.uk/analysis/comment-and-opinion/qs-drifts-towards-normality/5047570.article). Their initial spending and scattergun approach to gaining new clients is over. It appears that a new version is about to be rolled out. Let’s treat the first attempt as Quality Solicitors Beta version.

Where did they go wrong?

  1. The brand name was stomach churning;
  2. They offered glorified marketing and not enough back room support;
  3. For unknown reasons, they did not collaborate with third party funders (this is an underappreciated point)
  4. Individual members lost their identity; and
  5. They joined with uninspiring partners.

It is unsavoury to carry out a post-mortem in any further detail. The focus should instead look at how they can improve in what I am christening QSv2.0.

QSv2.0

  1. Use collective bargaining. Focus upon what discounts can be obtained through issues such as ATE premium offerings (due to volume); Professional Indemnity insurance; panel relationships with chambers; etc. If you can expose another company to potentially 100 separate referrals of business then this would give you the financial muscle. It is potentially a massive book of business. If QS could obtain 15-20% reductions then it would be a great offering to their members.
  2. Link up with a litigation funder. The bulk of the cases will be towards the lower end of the market, however if there is a number of high value claims which need funding; make sure there is a relationship with a third party funder. There is still a potential link-in with insurers at the lower end of the market (e.g. insuring against failure in conveyancing transactions).
  3. Offer financial advice and packages to members. This could be a financing service to cover WIP, tax payments, and other short-term cash flow issues. If QS is smart they could get paid at both ends – once by the finance company they arrange this through for their members and another payment from the membership fee paid by the firm.
  4. Act as an outsourcer for back room support such as payroll, IT, HR, compliance, complaints handling, auditing, etc. This could be sub-contracted out with QS getting a cut. There could be varying rates depending on whether there is a full service of back room support, or just a couple of departments
  5. Establish panel chambers on favourable rates. QS could learn a lot from insurance companies involved in litigation if they want to go down this route.
  6. Stop linking with those past their prime and who peaked in the 1990’s (WH Smith and Amanda Holden). Link up only with those that are up and coming, or do not bother at all.
  7. Allow member firms to rename themselves. A good old fashioned name is fine. It can still have the QS brand in there somewhere. It could just be “Jones Jones and Jones… a member of the QS firm network”

I was going to list 10, but unless QS pay me as a consultant, 7 is all they are getting!

Over and out.

Legal Orange.